TRUEPOINTNEWS ABUJA, — The Federal Government is considering a major overhaul of Nigeria's crude oil pricing and supply framework in a move aimed at reducing feedstock costs for domestic refiners, including the Dangote Petroleum Refinery, and strengthening local refining capacity.
A senior official of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that the proposals are being reviewed largely in response to requests from inland refiners seeking more reliable and cost-effective access to crude oil.
According to the official, the proposed reforms include adjustments to crude pricing and direct supply arrangements designed to improve the efficiency of the Domestic Crude Supply Obligation (DCSO) policy, which requires producers to make crude available to local refineries.
However, the official cautioned that the reforms are yet to be finalized, noting that key technical issues—including differences in crude grades and the pricing adjustment mechanism—must first be resolved before implementation.
Industry analysts say the proposed policy changes could significantly improve operations at the Dangote Refinery, Africa's largest single-train refinery, which has periodically faced challenges in securing sufficient crude supplies from domestic producers despite the existing DCSO framework.
They argue that a more transparent and efficient supply system would enable the refinery and other local processors to increase production, reduce dependence on imported petroleum products, and enhance Nigeria's energy security.
The proposed reforms also align with the Federal Government's broader objective of promoting domestic value addition, reducing foreign exchange pressures associated with fuel imports, and positioning Nigeria as a major refining hub in Africa.
Stakeholders are expected to closely monitor the outcome of the government's deliberations, as the reforms could reshape the country's downstream petroleum sector and influence fuel availability and pricing in the months ahead.
